Role of Mergers & Acquisitions in Organizational Change Research Paper

Role of Mergers & Acquisitions in Organizational Change - Research Paper Example It happens when an organization wants to enter into a new market or wants to lower the cost of production. Other organizations use this method to increase their market share in the market. This report demonstrates the crucial role played by the merger and acquisition in organizational change. Thesis Mergers and acquisitions play a vital role in the organizational change. This role can be developed if it is highlighted and addressed adequately. Introduction Definition Organizational change is the process by which a company or organization goes through change with an aim of remaining more relevant and achieve its goals within the right time, (Cassiman & Colombo, 2006). This change occurs when there is a change in business strategy, when an organization wants to rebrand or when there is a major change in parts the entire organization. These changes are important for an organization to remain relevant in the dynamic market field. The process of organizational change involves making bold changes and it may also involve expansion of the organization. Mergers and acquisitions play a major role in the process of organizational change. The issue of acquisition and mergers involves having a corporate strategy in matter to do with buying, selling and division of companies, (DePamphilis, 2008). This involves companies with similar entities coming together in the process of merger and agreeing on terms and condition of operation. A merger is slightly different from an acquisition. Takeover Acquisition is also known as take over. This process involves buying of the entire business entity. This may end up expanding the company that has bought the business entity, (Finkelstein 2010). Nature of acquisitions The term consolidation refers to a union of two or more companies to form a new joint business initiative. This means that none of the tow companies can survive independent of each other. It is also know n as merger of companies. We have both private and public acquisitions. The key point here is that acquisition and merger are done as part of the company’s strategy either in venturing into a new market of remaining relevant and expansion of the organization. If the target company has been listed in the stock exchange then it’s not a public acquisition acquisitions can either be public or private, (Mikael & Jani, 2011). Acquisitions can also be classified as hostile or friendly. The process of acquisition is very detailed and involves many steps. This is why studies show that 50 per cent of the acquisitions done are successful while others are not. In other words, acquisitions are difficult to achieve. The acquisition is perceived either as friendly or hostile depending on how the idea of buying the target company is communicated. In friendly cases, the negotiations are done in private that every deal is based on mutual agreement with the companies involved. In case of the hostile acquisitions the target company’s boards of directo rs are caught unawares. The company is sold without their knowledge, (Mikael & Jani, 2011). Hostile acquisitions can end up being friendly acquisitions with time. This happens due to improved terms of agreement after the procurement process. When we talk about acquisition, we are referring to a large company or organization procuring a small company. There are instances where the smaller company acquires the control of